January 9, 2025
RED FM News Desk
A sobering new report from the Eurasia Group warns that Canada is set to be more “profoundly affected” by ongoing political instability in the United States than any other nation in 2026. The risk management firm declared that the historic, stable partnership between the two neighbors “is history,” replaced by a period of deep trade uncertainty that threatens to destabilize the Canadian economy.
The report highlights a fundamental breakdown in cross-border relations that accelerated following the 2024 U.S. presidential election. Since President Donald Trump returned to office—bringing with him radical suggestions of annexing Canada as a U.S. state—Washington has pivoted toward an aggressive protectionist stance. This shift has resulted in a barrage of tariffs on essential Canadian industries, including steel, aluminum, automotive, and lumber, which the firm describes as “devastating” for domestic sectors.
According to Eurasia Group, Canada’s decades-long “comfort” with its integration into the American economy has become a significant liability. The report suggests that as Washington pursues a more volatile agenda, Canadian companies and institutional investors are increasingly likely to become “collateral damage” in political skirmishes. The firm warns that Canada’s traditional reliance on its southern neighbor is no longer a viable long-term strategy.
Looking ahead, the report notes that Canada’s urgent efforts to diversify its global trade and diplomatic ties will face “powerful headwinds” throughout the coming year. As the federal government attempts to forge new international alliances, it faces the precarious task of managing a deteriorating relationship with its largest trading partner while simultaneously shielding the economy from further American-led disruption.
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